Innovate for new risks, FM tells insurers

Mumbai: Finance minister Nirmala Sitharaman on Tuesday asked public sector general insurance companies to develop innovative products for emerging risks such as cyber fraud and diversify their portfolios to meet evolving consumer demands.

She reviewed the performance of public sector general insurers - New India Assurance, United India Insurance, Oriental Insurance, National Insurance, Agriculture Insurance Co, and GIC Re - in a meeting that was also attended by financial services secretary M Nagaraju.

The FM emphasised the need for robust underwriting, better portfolio optimisation, and aligning combined ratios with global benchmarks to ensure long-term financial sustainability. She said insurers must leverage data analytics and AI to develop precise pricing and claims models for improved risk assessment.

Sitharaman also highlighted the need to increase insurance penetration and density. While penetration in India remains at 1% of GDP - compared to the global average of 4.2% - density improved from $9 in 2019 to $25 in 2023. The insurers were asked to step up adoption of digital tools.